Who Are "They"?

Economic news is released on a daily basis from various private institutions and several government agencies. During my decades of study and reporting of economics and finance, I have long been frustrated with the “spin” placed on figures and statistics. This past week, in the government’s jobs report, the presentation was ridiculously poor, and intentionally (I believe) misleading.

Almost every release is preceded by an announcement that “economists expect fill-in-the-blank.” Most often, when the prediction is compared to the actual report, economists (the invisible people I call “they”) have missed by a significant amount. This was particularly true in March, when “they” expected many more jobs.

History tells us that “they” overestimate March jobs figures 79% of the time. This suggests that March is not normally a good month for job creation, but that “they” have not yet comprehended that simple fact.

For some reason, this reminds me of the story about the guy who got home late from work. When confronted by his wife for an explanation, he told her that he had walked home, and by not taking the bus, he had saved $2.50. In anger, she asked him, “why didn’t you not take a cab instead, thereby saving $25.00?” How we approach a situation can alter the implications, but not the results. No wonder economics is often called the “dismal science.”

The media does all it can to downplay or misrepresent everything about President Trump. Immediately after he took the ride on the famous gold elevator in Trump Tower to announce his candidacy, they were on his side. This lasted as long as they needed to help him unseat other Republican candidates.

Then, suddenly, Donald Trump became a threat to win the Primary (and later, the General election), and the media turned against him. They remain anti-Trump, and this week the reporting was especially grievous.

The Establishment Survey from the Bureau of Labor Statistics showed “only” 98,000 new jobs created for the month of March. This was presented as a “slowdown,” and the suggestion everywhere was that the “Trump Bump” was over.

Not so fast! The same agency also reports a monthly survey taken among actual people’s households, but the results were barely acknowledged in the media. With 472,000 new jobs reported, along with a 362,000 decrease in unemployed people, the actual results were fabulous. Barely noticed was a decrease in the unemployment rate to 4.5%, the lowest in years. New unemployment claims were also the lowest in years, and were also mostly ignored. Likewise, the ADP private survey showed a March increase of 263,000 jobs in the private sector.

Economically, we seem to be in the beginnings of a revival. The best way to propagate and accelerate economic growth is through tax cuts and reduced regulatory burdens. These are on the agenda in Washington, D.C. for after the spring break. We cannot predict the outcomes, but we know what should be done.